We have detected that you are using an unsupported browser. To ensure the security of your account, you must update your browser to the latest version.
Nous avons détecté que vous utilisez un navigateur qui n’est pas pris en charge. Pour assurer la protection de votre compte, vous devez mettre votre navigateur à jour avec la dernière version.
Your first-party cookies are currently disabled. You will not be able to access all of the functionalities on this website. To enable your first-party cookies, please follow the directions at https://www.whatismybrowser.com/guides/how-to-enable-cookies/auto.
Vos cookies internes sont actuellement désactivés. Ces cookies sont requis pour accéder à toutes les fonctionnalités de ce site web. Pour activer vos cookies internes, veuillez suivre les directives à l'URL suivante: https://www.whatismybrowser.com/guides/how-to-enable-cookies/auto.

TFSA: Save for anything you want – tax-free

Grow your investments tax-free to reach your savings goals faster

You’ll save for a lot of things during your career.

Some of your savings goals will be short-term, like a vacation or medical volunteering abroad. Some will be long-term, like retirement or buying an investment property. In all cases, a tax-free savings account (TFSA) can help you save faster and more efficiently because you pay no tax on the gains you make or when you withdraw your savings.

What is a tax-free savings account (TFSA)?

TFSAs were created by the federal government to give you a more effective way to save money. TFSAs have been around since 2009 and can play an important role in any well-rounded financial plan. Here’s why:

In a TFSA, you get to keep all the money you earn.1 You avoid the tax you would normally pay on interest income and capital gains.

You can use any combination of qualified investments, including cash, fixed-income and equities. This gives you control of the level of risk and reward in your TFSA.

Unlike an RRSP, annual contribution room is not based on your income. Whether you’re a resident, in full-time practice or happily retired, you’re entitled to the same lifetime contribution limit.

How $6,000 contributed annually, earning 6% interest, can grow faster within a TFSA2

TFSA Graph

How TFSAs work

Here’s what you need to know about putting money in and taking money out:

Determining your contribution limit
The Canada Revenue Agency sets the amount you can contribute and makes that information available every year. In 2023, you can contribute up to $6,500 per year — and much more if you haven’t contributed in previous years. There’s no income tax deduction for your contributions, but everything held in a TFSA can grow tax-free.

Taking money out of your TFSA
You can take money out of your TFSA any time. You don’t pay any tax or penalties on the withdrawals, and the amount is not counted as income. This is beneficial because the money you take out of your TFSA will not affect government benefits, pensions or disability amounts. If you withdraw funds, your contribution room is restored the following calendar year. Your MD Advisor* can help you determine your contributions and withdrawals, so you don’t end up overcontributing.

Make a TFSA part of your investment plan

It’s easy to open a TFSA from MD Financial Management and set up regular contributions to help you reach any savings goal faster.

* MD Advisor refers to an MD Management Limited Financial Consultant or Investment Advisor (in Quebec), or an MD Private Investment Counsel Portfolio Manager.

1 Withholding taxes by foreign governments may still apply. For example, the Internal Revenue Service in the United States levies a withholding tax on dividends from U.S. companies held by Canadian resident investors.

2 This graph is presented for illustrative purposes only and is not indicative of any investment. Past performance is no guarantee of future results. For the purposes of this illustration, it is assumed that the $6,000 annual contributions are made at the beginning of each year. The 6% annual growth is compounded monthly. All income earned is classified as interest income and is taxed at the highest federal (33%) and provincial (21%) rate. Taxes are calculated based on the year end account balance and paid at the end of each year.